For your business to become a success there are a number of important factors which should be considered:
- Commitment. As starting a business is a demanding process the determination and enthusiasm are essential.
- Skills. To be successful you will need managerial, financial, technical and marketing skills. As hardly anyone has got all these skills, you have to hire a partner or employee, or acquire them through training.
- Your product or service. They should have a proven market, but must not conflict with the patent or rights of existing businesses.
Additionally, there are a number of more specific matters.
The business plan
The business plan is the most important. Most likely you will need finance and no bank manager will lend money without a sensible plan.
The business structure
There are three common types of business structure:
This is the simplest form of operating in business. However, the business of a sole trader is not distinguished from the proprietor’s personal affairs. So, your personal assets can be in danger.
A partnership is similar in nature to a sole trader. As more people are involved it is recommended to draw up a written agreement of the terms of the partnership. Same as for the soletraders the business and personal affairs of the partners are not legally separate. Another possibility is to use a Limited Liability Partnership (LLP).
Here the business affairs are separate from the personal affairs of the owners. But there are certain legal regulations to comply with.
What is the appropriate structure for your business will depend on a number of factors and relevant circumstances. You should consider taxation implications, the legal entity, ownership and liability.
Depending on the type of the business structure, there are minimum requirements for the contents of business stationery, both paper and electronic.
Books and records
All businesses are required to keep records. The records can be maintained by hand or may be computerised. They should contain details of payments, receipts, credit purchases and sales, assets and liabilities. Please obtain professional advice before purchasing computer software to maintain your records.
The accounts are produced by using the books and the records. If the records are kept properly it will be easier to prepare the accounts. Accounts must be prepared for HMRC and if the business is trading as a company, there are strict legal requirements for their layout. The accounts and company tax return must be submitted electronically to HMRC in a specific format (iXBRL).
In certain circumstances a company and a LLP may need to have an audit. Also, they will need to make the accounts publicly available by filing them at Companies House within a strict time limit.
If you are starting, or have started a business in Chislehurst, Bromley, Kent and London areas, please contact us at Adiva Accountants in Chislehurst for further advice.